What to Know About Hired and Non-Owned Auto Liability Coverage
Driving to a client meeting? Sending an employee to pick up office supplies? Renting a car on your business trip? If your organization ever requires you or your colleagues to travel in a vehicle that is not owned by your company, it’s imperative that you understand hired and non-owned auto liability exposures.
Hired and non-owned auto liability insurance is designed to respond to accidents involving vehicles that your business uses for work purposes but doesn’t own, including:
- Rented vehicles or car services, such as a taxi or limousine (“Hired”).
- Vehicles that are not owned or registered to the business, such as an employee’s car used for business-related travel (“Non-Owned”).
Vehicles owned by your company require more comprehensive protection through a commercial auto insurance program. There are many cases, however, where you may find yourself in need of a rental vehicle, taxi or asking one of your employees to utilize their own car. For these situations, you really should evaluate a hired and non-owned auto insurance policy.
Perhaps the most important thing to consider is what hired and non-owned auto coverage is designed to cover and not cover:
- It does protect your company for liability expenses if you are sued as the result of an accident.
- It does include coverable expenses claimed by the other driver in the crash (i.e. medical treatment, their vehicle damage/repair, etc.).
- It does cover the defense costs associated with any lawsuit your organization may face.
- It does not cover any physical damage to the non-owned vehicle.
- It does not extend to the individual employee(s) involved in the accident.
- It does not cover accidents that may occur during normal work commutes; or when an employee is running personal errands during work hours.
If an employee gets into an accident, and they are deemed at-fault, legal action can be brought forth against them as an individual and also your business for the expenses related to the crash. Your employees should always have their own personal auto insurance policy in place providing adequate liability limits. If their insurance cannot fully cover the cost of a claim, your company may be at risk. Whenever a vehicle is rented for business purposes, we strongly advise employees be required to purchase the optional liability and collision coverage offered by the rental company.
Hired and non-owned auto coverage can be added as a standalone policy, or as an enhancement to most business liability insurance policies for a small increase in premium. If you find your business utilizing hired or non-owned automobiles, contact us today to see what your coverage solutions may be.